Polymatech Plans ₹1,500 Cr IPO : Here are the Details

Chipmaker company, Polymatech Electronics plans to launch a Rs. 1,500 crore IPO by year-end with goals to become a leading semiconductor player. Previously, the company had filed its red draft herring prospectus with SEBI in October 2023. This IPO will double the size of the initially planned public offer of Rs. 750 crores. Through this IPO, it is seeking to divest a 10% stake.

What prompted the IPO listing?

The financial performance of Polymatech reports that its revenue nearly doubled from Rs. 650 crores in FY23 to Rs. 1200 crores in FY24. The company has also expanded its chip packaging capacity. At present, it is making 2 billion chips annually. It has planned to scale up to making 20 billion chips in the next six years.

With further plans to set up a water fab, packaging plants, and expansion goals, the company is looking for a $5 billion investment over the next few years. Out of that, $1.5 billion will be invested in IPO proceedings.

The remaining funding will be met from internal accruals, private placements, and various financial incentive schemes offered by central and state governments for the semiconductor units. The company has also attained a memorandum of understanding with the Japanese firm Orbray for the sapphire ingot-growing technology.

What the funding will be used for?

Polymatech has an extensive plan of $5 billion out of which $1 billion will be allocated to set up a 1 million sq. feet facility for ingots. Another $1 billion will be invested in developing local and overseas packaging units. With these developments, the company plans to transform itself into a fully integrated end-to-end semiconductor company. A portion of this funding will be used for the general corporate expenditures aimed at expansion.

Current and future operations of Polymatech

The current operations of Polymatech comprise developing and completing trials for products that have various use cases in the field of:

• Medical applications
• Data transmission
• Specialised lighting for photosynthesis
• Aqua lighting and sanitization

The company is currently manufacturing the following products:

• Micro-controllers
• Wireless chips
• Logic chips
• Memory chips
• LED chips

Polymatech is strategically collaborating with industry partners like Orbray to diversify its semiconductor product portfolio. Through this collaboration, Polymatech aims to develop opto-semiconductor chips capable of emitting or detecting light. This innovative technology has broad applications, including advanced medical devices, optical communication systems, and environmental monitoring solutions.

What does the top management say about the funding needs?

Polymatech’s Managing Director and CEO, Eswara Rao Nandam, emphasized the significance of the planned investment, stating that the company intends to seek capital subsidies from the Government of India and relevant state governments to support this substantial initiative.

On successfully closing the deal with Japanese precision components manufacturer Orbray, Nandam remarked, “This is a historic day for us as we move closer to our company’s vision of becoming a ‘fully integrated, end-to-end semiconductor company. This MoU will enable us to progress towards converting ingot into products, thereby entering the next level of our growth story.”

Additionally, Nandam highlighted ongoing discussions with suppliers of Silicon Carbide Wafer and Silicon Wafer fabrication machinery, aiming to expedite the company's transition into a multi-wafer producer for the semiconductor industry.

What are the growth prospects of Polymatech?

With a $1 billion investment in semiconductor chip manufacturing, Polymatech aims to become one of the largest chip manufacturers in Asia by 2025. The company has revealed its projected revenue to touch $12 billion by 2030. The company is also looking forward to setting up two more facilities to boost its production capacity. By leveraging cutting-edge technologies strategic partnerships and expansion plans, Polymatech is well-positioned to capitalize on emerging opportunities and drive sustainable growth in the semiconductor sector

Want to invest in Polymatech unlisted shares?

The favorable market dynamics of the IT industry in India make Polymatech an attractive investment option in the unlisted share market. Polymatech electronics share price currently is at Rs. 795. Currently, 80% of the shareholdings of Polymatech is with the company’s promoters. Only 20% of the shareholdings are with the public in the unlisted stock market. You can gain from the movement in polymatech electronics share price.

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